Feds indict former Liberty County judge, three others for fraud in Hurricane Ike cleanup

AP

Saturday

Jan 29, 2011 at 12:01 AM

BEAUMONT (AP) — A former Liberty County judge is among three men indicted on federal charges accusing them of conspiring to fraudulently pocket thousands of dollars in Hurricane Ike cleanup money, prosecutors announced Friday.

Former County Judge Phil Fitzgerald, 51, the chief administrator of the county east of Houston, former Commissioner Lee Groce, 62, of Cleveland, and Mark Miksch, 52, of LaVernia were named in a 25-count indictment. Miksch was identified as Fitzgerald’s brother-in-law.

The indictment returned by a federal grand jury Wednesday alleges Fitzgerald received about $611,000 in kickbacks disguised as legitimate business transactions and that he and Groce conspired to award more than $3.2 million in debris removal work linked to Miksch.

Fitzgerald also was accused of using a generator bought with federal money for county use to keep his convenience store business running while the power was out elsewhere after Ike slammed into southeast Texas in September 2008. The indictment said in May 2009, he also asked the Federal Emergency Management Agency for reimbursement for fuel used to operate the generator, even though he knew the device wasn’t being used for Liberty County business.

“Instead of stepping up to the great challenge of what the hurricane brought to the Liberty County and working hard for the constituents, the defendants schemed to work hard for themselves,” U.S. Attorney John Bales said. “Liberty County deserved better. Texas deserves better. And this type of conduct cannot go unpunished and so it will not.”

Fitzgerald’s attorney denied any wrongdoing, said he had cooperated with federal authorities investigating the case, had nothing to hide and committed no crime.

“What makes the indictment ... especially tragic is that it could have been avoided,” Joseph “Lum” Hawthorn said. “Had the government allowed us the opportunity to present our side of the story before seeking an indictment, we are confident there would be no indictment.”

The three are scheduled to appear Tuesday before a federal magistrate in Beaumont. Lawyers for Groce and Miksch could not immediately be found.

Fitzgerald and Groce, both Democrats, lost re-election bids last year in a Republican near-sweep of the county. Fitzgerald had been judge since 2006. The previous 18 years he’d been elected justice of the peace. Groce was a county commissioner since 1986.

According to the indictment, Fitzgerald arranged for a local contractor to bid on debris removal and subcontract the work to Miksch, who then would return some of the contract money back to Fitzgerald. The indictment said Groce, a longtime friend of Fitzgerald’s and political ally and in whose precinct the work would be done, approved a bid to move the contract forward even though the bid was the most expensive before him.

Over the next five months, federal investigators said the local contractor received $3.2 million in debris cleanup payments and about half of that went to Miksch. The indictment said Miksch then funneled $611,000 to Fitzgerald in return for influencing the awarding of the debris removal contract.

“The scheme ... was created for the personal benefit of the defendants and others,” the indictment said.

Conviction on each of the charges carries penalties ranging from 10 to 30 years and $250,000 in fines per count. Prosecutors also are seeking $3.27 million in restitution.

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